The innate immune system of the host plays an essential role in clearance of pathogens from the lung and other organs in which both neutrophils and macrophages play important roles. However, subsequent to pathogen clearance, the neutrophil influx needs to be curbed and dead neutrophils removed to minimize tissue damage. This response is sometimes compromised in pneumonia in which persistent neutrophilic inflammation causes collateral damage to lung tissue causing acute lung injury. IL-10 is an important immunosuppressive cytokine whose neutralization or absence has been shown to affect resolution of inflammation evidenced by persistent immunopathologic injury observed after infection by diverse pathogens. However, IL-10 is not uniformly beneficial during pathogen infection. At early time points after infection with the Gram negative bacterium Klebsiella pneumoniae that causes nosocomial pneumonia, presence of IL-10 was found to impede bacterial clearance. We present our novel observation that absence of IL-10 later after infection causes persistent inflammation in the lung. We have recently reported on the identification of a lung cell type resembling myeloid-derived suppressor cells (MDSCs) that expands in response to LPS and exerts immunosuppressive functions via IL-10 production. We show that this cell type is the major source of IL-10 in the total lung. So, if IL-10 provided by this cell type helps to resolve inflammation and restore homeostasis after pathogen infection, why does the program sometimes fail in pneumonia? We have identified a novel mechanism by which cardiolipin (CL), whose levels significantly increase in the lungs of pneumonia patients, compromises host immunity by suppressing production of the anti-inflammatory cytokine IL-10. CL interacts with TLR7 and generates the potent PPARy antagonist cyclic phosphatidic acid (cPA) in MDSC-Iike cells. Our findings lead us to hypothesize that 1) CL is recruited to phagolysosomes due to interaction between CL and TLR7 where phospholipase 02 is involved in the generation of cPA from CL. 2) Antagonism of PPARy activity by cPA inhibits IL-10 production compromising an anti-inflammatory mechanism in the resolution of bacterial pneumonia. To address these hypotheses we will: Aim 1. Study the role of CL-TLR7 interaction in suppression of IL-10 production by CL and in regulating bacterial pneumonia. Aim 2. Investigate whether disabling PLD2 or boosting PPARy preserves late phase IL-10 production from lung myeloid cells in the presence of CL.